Regulation and Policy: Business services in the spot light at essential services hearings

It shouldn't surprise many that viable business telecommunications service competition without access to at least some of the incumbent telephone companies' network was a major point of contention during the first six days of cross examinations at the CRTC's hearings into essential facilities and wholesale services. Enterprise users of telecommunications services should be closely monitoring the development of this very important hearing: it could have a direct impact on how much they pay for a variety of telecommunications services. If the commission sides with the incumbent telephone companies - far fewer network facilities offered to competitors at mandated wholesale rates - then competitors will have to pay higher prices to access ILEC facilities. This cost would likely have to be passed on to customers. Companies such as MTS Allstream Inc. and Rogers Communications Inc. argue that competitors in the business services sector require access to the incumbent telephone companies' facilities. They highlight the fact that, contrary to the end-to-end facilities-based competition that exists in the residential market, there is no such competitor in the business market. And for the commission to significantly narrow the scope of essential facilities as argued by the major ILECs would effectively amount to a lessening of competition in this highly lucrative market. Competitors also point out that the local forbearance decision, as revised by the Order in Council last year, defines a facilities-based competitor as using both its own facilities and those of an incumbent telephone company. They say this means that access to an ILEC's network must be allowed under a new essential services regime and offered at mandated wholesale rates. The incumbent telephone companies, on the other hand, contend that well-financed, large competitors such as MTS and Rogers don't require access to their facilities. In joint testimony Bell Canada, Bell Aliant, SaskTel and Télébec argue that if a network facility has been duplicated once in a particular region then it can be duplicated again in all regions of similar size, and therefore that particular network facility shouldn't be considered essential. Telus Corp. doesn't go as far as the Bell group of companies with respect to network duplicability, but its proposal would similarly severely limit access to its essential facilities by competitors. The CRTC is going to have a difficult time balancing the interests of ILECs, competitors and business users when it comes to determining essential facilities, and this is where the transition period is going to be key. Once a network facility is deemed non-essential, then competitors need time to build their own infrastructure. If the transition period is too short, enterprise customers will likely have to face higher prices from competitors because they will have to pay higher rates to access ILEC wholesale services. If the transition period is too long, on the other hand, true end-to-end facilities-based competition in the business segment will take longer to arrive. Centrex services review elicits interesting commentsThe CRTC shouldn't deregulate Centrex services because there is a lack of competition and a lack of competing alternatives, according to MTS Allstream Inc. The company's comments come during second-round submissions in Telecom Public Notice 2007-14, which is considering forbearing from regulation ILEC Centrex services. The Manitoba incumbent telephone company suggests that ILECs' claims of competitive alternatives should be taken with a grain of salt because the evidence demonstrates that in fact there aren't competing services. MTS notes in its October 16 reply comments that despite rate increases from Bell Canada, Telus and SaskTel over the past number of years, there hasn't been a noticeable negative impact on customer churn. This, writes the Manitoba ILEC, "is prima facie evidence of market power." Interested party comments can be read here. Launching national DNCL not getting any easierThe likelihood of a National Do-Not-Call List (DNCL) continues to remain bleak and could be even farther away based on comments to a CRTC proceeding to determine whether investigative authority over unsolicited telemarketing calls should be handed to the Commissioner for Complaints for Telecommunications Services. The CRTC is currently trying to find an appropriate way to handle unsolicited telemarketing calls and to fund investigation of complaints. But parties to the proceeding are generally divided over a couple of key issues including registration with the operator of the registry and paying fees to support investigations. One only needs to read the comments of the Canadian Marketing Association (CMA) to get a sense of why the National DNCL is on the slow road to nowhere. "CMA believes that it is inappropriate for anyone other than either the CRTC through government funding or the government directly to assume the cost of, or pay associated ‘rates' to any third party provider. CMA is of the position that as the government believes it is worthwhile to create a telemarketing regulatory regime (only a part of which is represented by the National DNCL) in the public interest, it is incumbent of the government to fund the enforcement costs through government appropriations...Furthermore the CMA believes that it is completely inappropriate for any telemarketers or clients of telemarketers to be charged fees for the investigation of Unsolicited Telecommunications Rules complaints, beyond justified Administrative Monetary Penalties (AMPs) for contravention of the Rules."Busy telecom schedule continues at the commissionLast month, the CRTC kicked off two more public consultations: Telecom Public Notice 2007-17 is reviewing the rules pertaining to mandatory customer notice on contract renewal and requirements for service destandardization/withdrawal and Telecom Public Notice 2007-19 is looking at a proposed practice direction on the provision of confidential access to confidential information.

Regulation and Policy: Business services in the spot light at essential services hearings

News | October 22, 2007

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